Prominent trader Josh Olszewicz claims that Bitcoin, the flagship cryptocurrency, has formed what appears to be an inverse head and shoulders pattern (iHS).
Bitcoin is currently changing hands at $112,009, declining by 3.4% over the past week.
Much-coveted bullish pattern
The bullish reversal pattern typically appears following a prolonged downtrend, which is not the case in this particular case since Bitcoin has seen months of sideways action.
The pattern is typically comprised of left and right shoulders, as well as the head.
The chart shared by Olszewicz shows Bitcoin's price action over a period from May to November, specifically focusing on the cryptocurrency's price action from November until May.
Bitcoin logged a low in late August, which can be seen as the potential left shoulder on the chart. The lower from mid-September can be identified as the potential head. Meanwhile, the cryptocurrency's current price action can be interpreted as the right shoulder of the much-coveted pattern, but it remains unclear whether it has been fully formed.
The pattern would be confirmed if there is a breakout above the neckline.
Eyeing $130,000?
The chartist has projected a potential target of roughly $134,000 if the aforementioned breakout does occur. The main resistance levels are $127,000 and $119,000.
Tiny odds of record highs
According to Polymarket bettors, Bitcoin has only a 2% chance of surging to the $125,000 level.
At the same time, the cryptocurrency has a 28% chance of plunging to $107,000.
This shows just how bearish the crypto market sentiment currently is.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team